Which of the following one-year 1000 USD bank loans offers the lowest effective annual rate?...
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Which of the following one-year 1000 USD bank loans offers the lowest effective annual rate? a) A loan with an APR of 8%, compounded monthly. b) A loan with an APR of 8%, compounded annually, that also has a compensating balance requirement of 10% (on which no interest is paid). c) A loan with an APR of 8%, compounded annually, that has a 1% loan origination fee.
Which of the following one-year 1000 USD bank loans offers the lowest effective annual rate?
a) A loan with an APR of 8%, compounded monthly.
b) A loan with an APR of 8%, compounded annually, that also has a compensating balance requirement of 10% (on which no interest is paid).
c) A loan with an APR of 8%, compounded annually, that has a 1% loan origination fee.
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